On the Economics of Illegal Parking

Currently, an initiative of various organizations is trying to promote an increase in penalties for illegal parking as part of a petition. This article takes this as an opportunity to analyze the economic background of the project. Here the theory of crime offers itself. In addition to the current discussion about higher fines, the paper uses economic theory to show which parameters can be influenced by the state to steer the decision of a potential parking offender in the desired direction. These are, in particular, the probability of detection, the amount of the penalty, the type of penalty as well as the costs of the potential parking offender’s conscience. On a model-theoretical level, the behavior of the potential parking offender on the one hand and the behaviour of the municipality on the other hand are discussed. The paper thus contributes to urban economics and shows the implications for transport policy. © 2020, The Author(s).